102bn/- to help fight poverty, support projects

from IPP Media

By Guardian Reporter

Japan yesterday committed itself to give Tanzania 102.4bn/- for use in general budget support and financing the national strategy for economic growth and reduction of poverty, commonly known as Mkukuta.

Japan�s Ambassador to Tanzania, Makoto Ito, and Finance ministry permanent secretary Gray Mgonja signed an agreement to that effect on behalf of their respective countries.

A third signatory was Koji Tanami, deputy governor and managing director of the Japan Bank for International Cooperation (JBIC).

A press statement issued by the embassy at the signing ceremony in Dar es Salaam said part of the aid would be a 74.2bn/- loan that would be directed to the Arusha-Namanga and Namanga-Athi River road development projects.

According to the statement, the Japanese government and the African Development Bank would co-finance the construction of the international trunk road linking Arusha in Tanzania and Athi River in Kenya through the common border post of Namanga.

The Japanese loan would be spent on the construction of the between Arusha-Namanga stretch, he said, adding that a further loan worth 21.7bn/- would go into supporting the World Bank�s Poverty Reduction Support Credit (PRSC).

There would also be non-project grant aid to the tune of 6.5bn/- that would be an input into the Treasury for fiscal year 2007/2008.

`Of the total amount of the grant 545 million yen will be provided for the poverty Reduction Budget Support in order to support the National Strategy for growth and Reduction of Poverty and 55million yen shall be disbursed into the pooled Fund for the Poverty Monitoring System,` added the statement.

It said the loans for the cross-border road project and for PRSC would be financed by JBIC.

`This loan assistance will be extended under the newly established Minimal Interest Rate Initiative (MIRAI) which offers preferential terms of loans to low income LDCs with the annual interest rate of 0.01 per cent,` the statement said.

Meanwhile, Mgonja commended the Japanese bank�s decision to re-introduce for Tanzania the Yen Loan Facility which has lain suspended for 25 years.

`The re-introduction of the facility is a reflection of the improvement in macroeconomic management in the country and strengthening its debt sustainability,` he said, noting that Tanzania would monitor the way the money will be spent to ensure that design and construction works meet acceptable standards.